Bank credit to the infrastructure sector grew at a compound annual growth rate of 39.5 per cent in the last 14 years.

The government on Wednesday set the ball rolling to revive stalled highway projects by authorising the National Highways Authority of India (NHAI) to pay compensation to concessionaires in cases of delays not attributable to them.

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The decision, taken in a meeting of Cabinet Committee on Economic Affairs (CCEA), is expected to immediately benefit about 34 stalled projects. “The CCEA has given its approval for authorising National Highways Authority of India (NHAI) to allow extension of concession period for all current projects in BOT (Toll) mode that are languishing during the construction period due to causes not attributable to the concessionaire,” an official statement said.

The decision regarding eligibility of projects for the extension of concession period, and the extent of time extension required will be taken by National Highways Authority of India on a case-to-case basis based on the recommendation of the concerned Independent Engineer (IE).

The concerned IE, both individual and the firm, shall be accountable for the assessment of the extension recommended in the concession period.

Projects using the special dispensation shall have to achieve physical completion in the next three years.

The statement added that the National Highways Authority of India will be authorised to pay compensatory annuities to the concessionaire corresponding to the actual period of delay not attributable to the concessionaire upon successful completion of the project. The number of annuities payable, including compensatory, will be capped by the number of annuities envisaged in the concession agreement.

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“By adopting the policy, all major stakeholders in the PPP arrangement — the Authority, lender and the developer, concessionaire would have an increased comfort level resulting in revival of the sector and this will bring relief thereby to citizens /travellers in that area,” the statement said.

New Delhi: The government on Wednesday also empowered the Ministry of Road, Transport & Highways (MoRTH) to approve projects with civil construction cost up to Rs 1,000 crore.

This would be done by segregating civil construction cost from capital cost of projects which include land acquisition expenses. This will enable the ministry to clear more projects without having to go to Cabinet Committee on Economic Affairs and speed up road development.

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All infrastructure projects costing over Rs 1,000 crore currently have to be approved by the Cabinet Committee on Economic Affairs and given the high cost of land, many projects will remain below the threshold if this component is not included in the
project cost. ENS